The transfer pricing documentation requirements in Saudi Arabia consist of contemporaneous documentation and three-tiered transfer pricing documentation.
Under the By-Laws published on 15 February 2019, taxpayers with controlled transactions must submit an affidavit from a licensed auditor certifying the consistent application of the transfer pricing policy. Additionally, documentation as per BEPS Action 13 and an electronic disclosure form (CTDF) must be maintained. There is no minimum threshold for maintaining the CTDF form, and it applies to all taxpayers with controlled transactions. The CTDF form needs to be submitted to the General Authority of Zakat and Tax (GAZT) by 30 April 2019 for taxpayers with a 31 December 2018 year-end.
Taxpayers with controlled transactions exceeding SAR 6 million during the fiscal year are required to prepare a master file containing information on the global business operations and transfer pricing policies of the multinational enterprise group. The GAZT can request the master file from 120 days after the fiscal year end, and the deadline for providing the report is within 90 days of the request. This requirement applies only if the SAR 6 million threshold is met.
The Saudi Arabian transfer pricing guidelines, issued in June 2020, state that controlled transactions include transactions between domestic related parties.
Taxable persons are required to maintain and provide the GAZT with a Local File containing detailed information on all controlled transactions. The local file needs to be submitted within seven days upon request by the GAZT.
The three-tiered transfer pricing documentation includes a Local File, Master File, and Country by Country (CbC) Reporting.
The Local File should be prepared by taxpayers with related party transactions exceeding SAR 6 million. It contains detailed information on all controlled transactions and other required information. The GAZT can request the local file at any time from 120 days after the end of the reporting year, and the taxpayer has a minimum of 30 days to provide the information.
The Master File should be prepared by taxpayers with related party transactions exceeding SAR 6 million. It provides information on the global business operations and transfer pricing policies of the taxpayer’s group. The GAZT can request the master file after the taxpayer’s annual tax return due date, and the taxpayer has a minimum of 30 days to provide the information.
Taxpayers belonging to a multinational group with group revenue above SAR 3.2 billion must prepare a Country by Country (CbC) report. The report should be submitted within 120 days after the year-end, and it applies to fiscal years ending on or after 31 December 2018. The report can be filed in either Arabic or English.
The deadlines for providing the Master File, Local File, and any content thereof are within 30 days of the GAZT’s request. During the 2019 calendar year, taxpayers have an extension of 60 days to provide the documents. The first report should be prepared for the group’s fiscal year ending 31 December 2018 onwards, and it should be filed within 12 months of the year-end to which the report relates.